(Bloomberg News) Emerging-market stocks fell, dragging the benchmark index to its largest quarterly loss since 2008, after data on South Korea's industrial production and Chinese manufacturing fueled concern global growth is slowing.

The MSCI Emerging Markets Index dropped 1 percent to 885.85 at 1:05 p.m. in Singapore, paring its weekly gain to 2.8 percent. South Korea's Kospi Index lost 0.4 percent and the Hang Seng China Enterprises Index dropped 3.7 percent. The Philippine Stock Exchange Index gained 3.2 percent, Asia's biggest rally, after Economic Planning Secretary Cayetano Paderanga said second-half growth will accelerate from the first six months.

"In the very near-term, all Asian assets, as a type of risk assets, of course will suffer from this risk aversion," said Frances Cheung, a senior strategist at Credit Agricole CIB, in a Bloomberg Television interview in Hong Kong.

Data today may show U.S. consumer spending slowed and German retail sales fell, after South Korean industrial production expanded less than forecast and a Chinese manufacturing index indicated output shrank for a third month. Emerging-market equity funds posted a ninth week of outflows, with withdrawals almost doubling from the previous period, Citigroup Inc. said.

"Concerns about U.S. economic slowdown are lingering," said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. "We need to see more U.S. reports."

MSCI's emerging-markets gauge has dropped 23 percent since June, the most since the fourth quarter of 2008. Companies in the index are trading at 9.5 times estimated earnings, less than the four-year average multiple of 12.3 times.

Korea's Output

Samsung Electronics Co. dropped 1 percent, halting a four- day rally. South Korea's output rose 4.8 percent from a year earlier after gaining a revised 4 percent in July, Statistics Korea said today. The median estimate of 14 economists in a Bloomberg News survey was for a 6.1 percent gain.

HSBC Holdings Plc and Markit Economics reported a reading of 49.9 for its China purchasing managers' index in September, below the 50-level that separates expansion from contraction, for eight months through March 2009. That marks the longest contraction in Chinese manufacturing since 2009.

Anhui Conch Cement Co. and machinery maker Sany Heavy Industry Co. paced declines among Chinese industrial stocks. Tongling Nonferrous Metals Group Co. led drops by commodity producers, which were the worst performers among the nation's stocks since June. The nation's markets will be closed all next week for holidays.

China's Outlook

Evergrande Real Estate Group Ltd. and Brilliance China Automotive Holdings Ltd. sank at least 12 percent, leading losses among China-related companies trading in Hong Kong. More than half the global investors surveyed by Bloomberg predict the nation's growth will slow to less than 5 percent annually by 2016, according to results released yesterday, when Hong Kong's financial markets were closed.

Chinese Internet stocks tumbled in New York trading yesterday after a top U.S. securities regulator said the Department of Justice is reviewing allegations of accounting fraud at firms operating out of the Asian nation.

The Philippine Stock Exchange Index rose after Central bank Governor Amando Tetangco said the nation's monetary policy is "flexible" and will support growth while keeping inflation within target.